Tips to utilize retail spaces for maximum impact, profitability

With the liberalisation of the FDI policy, evolving consumer preferences and entry of global retail brands in India, mall developers are busy adapting their retail developments to the changing requirements and trends. Indeed, one of the most imperative transformations is the increasing focus on planning and optimisation of retail spaces so as to extract their highest potential.

An imperative transformation in mall space is the focus on planning and optimisation of retail spaces so as to extract their highest potential (Image Courtesy: Sorbis / Shutterstock.com)

Due to growing income levels and the inexorable rise of Gen Y, Indian consumers have become more discerning than never before. To meet the demands of this trend, mall developers are now using a structured approach for developments by doing their research to understand consumer requirements right from the planning stage of their malls. In this way, they are able to optimise their mall layouts and designs, incorporating critical conveniences and features.

Evolution as an imperative

Indian mall developers have understood the importance of offering the right combination of retail categories, entertainment and F&B. Therefore, we are now seeing the creative utilisation of unused mall spaces and even parking space to incorporate newer retail categories to attract consumers and drive additional revenue. Today, the priority is to enhance the per-square-foot productivity of the mall while simultaneously providing value to consumers.

In order to increase the all-important ‘dwell time’ of shoppers, vacant spaces are now being reinvented into seating arrangements, kiosks, vending machines, ATMs, interactive information points and activities for children.

India’s increasing integration into the Global Village has ushered in a whole new slew of international brands. This, coupled with increased FDI inflows, has necessitated the optimization of space utilisation in malls so as to acclimatise them to international standards, store formats and norms.

Developers of existing mall developments must continually assess existing mall spaces with a view to making them more compatible with the requirements of international brands in terms of sizes and formats. Also, it is important for malls focused on superior performance to accommodate the upcoming global brands regardless of space availability.

Change and adaptation is the mantra for success today, be in terms of optimising space, design oriented changes, advertising and promotion, casual leasing or implementation of softer features such as change in the location of stores.

On-ground Improvements

In the existing mall developments in the country, the major steps being taken to improve space utilization and maximise returns are:

• Elimination of alleys or narrow passages: Some malls with inherently poor design have produced such ‘dead spaces’. By merging such non-performing spaces with existing stores, better circulation is generated and secondary spines that create dead spaces are eliminated.

• Good frontage and accessibility: Providing frontage and good accessibility to almost all stores in the mall, either by merging stores or by interchanging the categories within them.

• Relocating stores and right-sizing stores of existing brands: Changing the positioning of anchor stores to improve circulation or reducing the size of existing brands to bring in first-time brands.

• Introducing novel categories and brands: Such new brands can be introduced in spaces that were not utilised properly earlier, thereby generating footfalls in those micro-areas.

• Utilising parking space: Parking spaces and other ancillary spaces can be used for advertisements, services such as car wash and servicing and promotional events.

India being a fast-paced market, developers are now designing their malls in a manner that allows a certain degree of flexibility and dynamism. In this way, they can introduce newer attractions from time to time. Mall developers now regularly track the performance of brands in terms of sales per square foot so as to assess whether the brands are utilising their space optimally. It has been evident in the industry that many brands are reducing their store sizes in order to maximise per square foot productivity.

ABOUT THE AUTHOR:Anuj Puri is the Chairman & Country Head of JLL India. The views and ideas expressed in this article are his own.